China Morning Snapshot – 20 April 2018

Dalian Commodity Exchange entered the break-time on a mixed note. September delivery contract for PP fell CNY46/ton ($7/ton) to CNY8965/ton ($1218/ton without VAT) while LLDPE contract added CNY5/ton ($1/ton) to CNY9285/ton ($1261/ton without VAT).  

The final trading day of the week sees domestic spot market hold relatively stable. Homo-PP traded in Eastern China in the range CNY8800-8950/ton ($‎1196-1216/ton without VAT), EXW China, cash equivalent.

Spot LLDPE film offered in Northern China at CNY‎‎9400-9600/ton ($‎1277-1304/ton without VAT) with the same term. 

Local suppliers continue reporting of a diminished purchasing interest among buyers, and yet there has not been any intention of cutting prices to speed up the sales process. “We have a reason for the bullish expectation including stronger energy and upstream market, coupled with low inventories at Sinopec and CNPC warehouses. We do hope to see market sustain the stabilisation trend ahead of the Labour Day holiday,” a trader added.

On the other hand, inventories risk remains high. Despite total PP and PE stock at Sinopec and CNPC has fallen another 10,000 tons day on day to approximate 800,000 tons as of 20 April 2018, commercial inventories at traders and private producers remain above the average, according to market sources.